It is two months since the year 2020 began. It is time to maximize your returns through investment. Instead of relying on safe investment options like FD or CD, you can smartly diversify your investments and get higher returns. So through this article we are going to give you information about the five best investment options, which can provide you better returns in 2020.
1. Real Estate
Real estate can be an attractive investment option for investors who are looking for a long-term investment option. This type of investment can prove to be beneficial in the long term, because if you select the right property and buy it, it will give you capital gains, tax benefits and rental income. Investing in real estate can be a bit tricky, but you can make a profit by investing smartly. With this, if you invest by taking loan, you can get tax benefits on loan repayment. You can also take advantage of government subsidies, such as CLSS subsidy under the PMAY scheme. While investing in real estate, know the true value of the property and do not get caught in any type of fraud. Also, invest only if you have a long-term view.
Gold is the most traditional method of investment in India. This is the best time to invest in gold. The Indian economy has suffered some turmoil by the end of 2019 and the retail inflation rate has increased to 5.54%. Experts agree that 10% investment in gold not only helps to diversify your investment portfolio, but also covers inflation or losses in the stock market. If you stay invested for a long time, gold can give good returns. According to reports, gold prices may increase significantly by Diwali 2020. In addition, you can invest in sovereign gold bonds or gold ETFs to store gold in electronic format and reduce future losses.
3. Debt mutual fund
A debt mutual fund is a type of mutual fund. It is invested by taking money from investors. The main difference between these is that its main investment consists of fixed income securities. This year it can be an ideal investment avenue for investors, as the total AUM of mutual funds in India reached 27 lakhs by November 2019. Investors can benefit in two ways by investing in debt mutual funds. For example, the expense ratio of debt funds is much lower than that of equity funds, as the overall management cost of the fund is low. Also, there is less risk in its investment. It carries equal risk to traditional FDs. For this reason, investors can invest their surplus funds for short term or medium term. In addition, you can make regular and disciplined contributions to mutual funds through SIP (SIP).
4. Normal/Region Provident Fund
The interest rates of Small Savings Schemes and PPF remain unchanged for the fourth quarter of FY 2019-20. Hence PPF is giving interest rate of 7.9%. Therefore it can be an attractive option for long-term investment avenue. Investors are looking for investment options that offer better returns than bank deposits due to multiple rate cuts by the RBI. Investing in PPF provides high rate of return as well as tax benefit.
5. Mid-cap equity fund
Investors who want decent returns within a short period of time may consider investing in a mid-cap equity fund. Mid-cap funds may prove to be ideal investment options in 2020. The mid-cap fund’s price-to-earnings ratio has remained high for the past seven years. When you invest in mid-cap funds, you are mainly investing in stocks of companies that figure in the list of the 101st to 250th largest companies in terms of market capitalization. These companies have the potential to deliver higher returns than their benchmark. Mid-cap companies include companies that are neither too big nor too small. These companies are more likely to do better than before. It is an ideal investment option for those liberal investors who are interested in investing in equity.
Investing is the best way to increase your money over time. Due to the many investment options present in the market, you should be aware of the advantages and disadvantages of each and invest only on the basis of your risk capacity, duration of investment, investment target etc.